Yes Bank jumps 11% on report of PE firms showing interest for a major stake

Yes Bank shares rallied 11 percent on July 16 after a media report indicated that private equity firms showed interest for a major stake in the private sector lender.

The stock closed at Rs 103.90 on the BSE, up 11.48 percent amid high volumes.

“US-based private equity investor made an offer to acquire worth $850 million stake in the bank, the term sheet offer for which was made over the weekend,” The Economic Times said quoting unnamed sources.

“There are three more PE players in the consortium, two US-based and two domestic. The consortium leader may pick a 10 percent stake in the bank, while the rest may together pick another 10 percent,” the report added.

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The announcement might come after the bank’s June quarter earnings, due on July 17, are released.

The private sector lender in its clarification note to exchanges said the bank in the ordinary course of its business continued to explore various means of raising capital/funds through issuance of securities to a diverse set of investors, in order to meet its business/regulatory requirements.

The lender is looking to raise $1-1.2 billion, as reported by BloombergQuint. However, to avoid excess equity dilution for its existing shareholders, it might do so in two rounds, the BQ article said quoted sources.

Over the past few weeks, there has been a lot of unfounded speculation about Yes Bank’s Board and management stability, asset portfolio, future growth prospects amongst other things.

The bank refuted the same saying its financial position is sound and stable and its liquidity and operating performance continue to be robust.

Shares of Yes Bank have lost 74 percent of its value in the last one year.

Following the announcement of the bank’s March quarter results earlier this year, where it reported a loss of Rs 1,506 crore, analysts downgraded the counter.

Note: The story has been updated with the latest figures. 

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